Investment firm Vanguard has become the largest institutional shareholder of MicroStrategy, attracting attention to its strategy and stance on cryptocurrencies.
Vanguard's Stake in MicroStrategy
Vanguard now holds over 20 million shares of MicroStrategy, amounting to approximately 8% of the company’s outstanding Class A common stock. This stake provides Vanguard with indirect exposure to more than 200,000 Bitcoins held on MicroStrategy’s balance sheet, marking a 26.3% increase in holdings from January to April 2025.
Vanguard's Cautious Approach to Cryptocurrencies
Despite its growing indirect exposure to Bitcoin through MicroStrategy, Vanguard has maintained a cautious stance on cryptocurrencies. Vanguard CEO Salim Ramji emphasized in a Bloomberg interview that the company is not looking to change its approach to cryptocurrencies, stating, “We don’t get caught up in the latest fad, but we’re dependable for the long term.”
Challenges of Passive Investing
Vanguard's unexpected exposure to Bitcoin through its stake in MicroStrategy has drawn attention to the realities of passive investing. Bloomberg ETF analyst Eric Balchunas noted that passive index funds require holding all stocks within the index, regardless of the company's focus. Balchunas remarked that Vanguard's significant exposure to a company deeply tied to Bitcoin highlights how index investing can lead to unintended exposure.
The situation with Vanguard and MicroStrategy underscores the complexities and paradoxes of passive investing and the ambiguous stance of major institutional investors towards cryptocurrencies.
